As a rule, researches tend to focus solely on the way in which the concepts of the cost of debt and one of the governance types interact. However, the present study is aimed at exploring the way in which the cost of debt is related to other resources of the board, such as its financial experts. The research also seeks to scrutinize the impact that the state ownership produces on the cost of debt. Afterward, an analysis of the possible interactions between the key variables is due.
Specifically, several characteristics of the board of directors will be taken into account during the research. The essential factors include its size, the degree to which it can make decisions independently from state authorities, and the role that its financial experts play in the management of key operations. The study focuses on the effects that the specified factors have on the cost of debt levels observed in GCC public organizations.
All parties involved from debt holders to state investors are likely to find the outcomes of the research important for their further choice of actions. Particularly, the study results inform the decisions concerning the control tools to be established in the specified environment. In addition, the research offers extensive opportunities for legal authorities in the GCC states by shedding light on the issue of business regulation techniques. However, there are certain limitations to the research.
For instance, the sample is comparatively small, which may lead to a drop in the quality of the end result. In addition, by restricting the choice of companies to the ones located within the GCC setting, the authors of the study reduce the objectivity of the results. Thus, the outcomes of the research may turn out to be invalid when applied to the economic setting of a different state. The fact that Kuwait and Qatar were excluded from the analysis due to the lack of data adds to the drop in the credibility of the results.
Effective leadership is the main driving force in every successful private or public organization (Freeman & Siegfried 2015). To become a competent leader, a manager should possess adequate skills and encourage his or her followers to focus on the targeted vision. Leadership is therefore defined as the ability to lead others by example, communicating goals adequately, and mobilizing resources to ensure positive results are realized promptly (Koryak et al. 2015). Entrepreneurship leadership has emerged as a new model that guides managers in different organizations to mentor others in an attempt to deliver the intended objectives. Ward (2017) believes that entrepreneurship leadership is the act of “organizing people to achieve a specified goal using various entrepreneurial strategies” (p. 75). Some of these approaches include change management, innovation, risk optimization, and inclusivity. When such attributes are taken seriously, an organization will find it easier to achieve its goals. Unfortunately, the application of entrepreneurship leadership by managers has not delivered desirable results in many organizations in the public sector. Focusing on the unique attributes and concepts of entrepreneurial leadership, this paper explores why managers often fail to implement meaningful changes in the public sector. The discussion goes further to describe how entrepreneurship can be used to implement change in a government organization.
Leadership in the Public Sector
Many theorists have presented various models to describe how a change in a public firm can be managed. It should also be observed that some of the presented theories offer conflicting ideas regarding the issue of change management. However, the models appear to present remarkable concepts and initiatives that can be applied successfully in public organizations that want to realize their goals much faster (Koryak et al. 2015). Organizational managers are equipped with adequate competencies that can be applied to effect change. The manager will be required to go a step further to ensure the intended change process is implemented successfully.
Freeman and Siegfried (2015) assert that a change model is critical whenever planning to initiate a new idea in an organization. Kurt Lewin’s change model has gained popularity within the past few decades because of its ability to deliver positive results. The theory encourages leaders to follow three distinctive steps to ensure the targeted change is managed successfully. These stages include “unfreeze, change, and refreeze” (Ward 2017, p. 52). An entrepreneurial leader who applies this change model will realize the intended goals. Throughout the change process, leaders must communicate effectively with their followers. This can be realized through the use of oral or written communication mechanisms. Employees and stakeholders should be encouraged to become active participants.
Experts in organizational management and leadership argue that a successful change should be informed by a clearly defined need (Freeman & Siegfried 2015). This means that the targeted change will be aimed at transforming a given situation. It can also be initiated whenever planning to create a new culture. Ward (2017) goes further to indicate that the effectiveness of a given change will always be dictated by the aptitudes of the managers. The top leaders should be able to disseminate the required information, entice their followers, create the best environment, and remain supportive throughout the process. Skilled entrepreneurial leaders have been observed to go a step further to apply adequate strategies that are dictated by the uniqueness of their respective organizations.
Several propositions capable of changing organizations in the public sector have been identified by researchers. To begin with, leaders should come up with a clear need for the intended change. As indicated earlier, the level of persuasion will increase significantly if the followers appreciate the proposed change (Ward 2017). The move will ensure everyone is aware of the change and its direction. The leader must go a step further to design a workable strategy for supporting and implementing the change. A vision is needed to ensure every follower understands his or her role throughout the process (Koryak et al. 2015). Resistance will always be encountered whenever planning to implement a new change. With effective teamwork and internal support, a leader will reduce this kind of resistance and eventually record positive results. The workers in the firm will be willing to be part of the targeted change.
The role played by the top management will dictate the success of any proposed change within the public sector. The managers will use their dexterities to promote positive behaviors, foster communication, and encourage every employee to support the change. External players and stakeholders are usually involved in an attempt to deliver positive outcomes. This approach is critical because many public organizations tend to have political architects and participants pursuing specific objectives (Koryak et al. 2015). The provision of resources is another critical factor that can determine the success of change implementation within the public sector. Managers should monitor scarce resources, train their workers, and present new activities depending on the nature of the change (Downe, Cowell & Morgan 2016). New departments can also be created to ensure every activity runs smoothly. These attributes should be supported using an effective change model. This strategy will ensure every obstacle or challenge is addressed before it affects the effectiveness of the process.
Why Leaders Often Fail to Change a Public Sector Organization
The above discussion shows conclusively that government organizations managed by competent entrepreneurship leaders can benefit from effective change processes. Such firms will eventually offer desirable services to the targeted beneficiaries. Theorists in leadership have presented convincing factors and models to support change in every public sector organization. Unfortunately, researchers have observed that many public organizations have been mismanaged by their leaders thus finding it hard to meet the needs of the targeted people (Ward 2017). It is also acknowledgeable that some leaders in such organizations apply their skill sets to implement change successfully. This fascinating scenario has encouraged more scholars to examine why many leaders have been finding it hard to change such public organizations.
Within the past three decades, many private organizations have been observed to deliver quality services and products to their respective clients. This has not been the case for many public organizations or agencies. Despite such observations, most of these organizations tend to have reasonable goals, effective processes, carefully designed policies, and accountable leaders (Freeman & Siegfried 2015). This scenario has encouraged analysts to examine some of these organizations in an attempt to come up with convincing arguments. A proper understanding of the obstacles making it hard for leaders to implement change in public organizations can be used to come up with appropriate solutions.
The first reason why leaders often fail to support sustainable change in the public sector is that they are appointed based on their political connections or technical skills (Koryak et al. 2015). This means that such managers might have unquestionable skills in change management but lack the expertise in sustaining the process. Ward (2017) indicates clearly that the inability of many public agencies to implement successful changes is caused by ineffective leadership. A manager who has the required technical expertise might not possess adequate skills in change management. This fact explains why a leader who has managed change successfully elsewhere should be recruited to support the performance of a public sector agency. It would also be appropriate for recruiters to focus on individuals who have managed to sustain meaningful changes in various organizations. By so doing, more firms in the public sector will promote new changes and eventually support the changing demands of every citizen.
Most of the leaders in different public organizations lack sufficient time to implement meaningful changes. The recruitment process for a person to head a public sector organization has always been rigorous (Freeman & Siegfried 2015). More often than not, the process takes several months due to the bureaucracies involved. It is also notable that most of the leaders are political appointees. The individuals must be vetted by different committees before assuming power. Any regime change will also result in transfers, reappointments, or policy implementations. These aspects explain why many leaders in public agencies focus on policy issues and reforms because they can be realized much faster (Ward 2017). Consequently, many leaders acknowledge that the process of implementing changes in such agencies can be time-consuming. They might also be unavailable to manage and support the change until it is completed successfully.
The public sector is governed by strict rules to ensure public resources, assets, and funds are not misappropriated. This means that issues such as budgeting, hiring, procurement, and recruitment must be done by specified laws. Leaders in public organizations are not allowed to change certain procedures, processes, or functions without being permitted by specific stakeholders (Freeman & Siegfried 2015). These attributes have led to workplaces that are inflexible when it comes to change implementation. Legal requirements and doctrines should also be followed to ensure the powers of different leaders are trimmed. Any malpractice or disobedience can attract huge penalties. That being the case, every leader in a public organization will be keen whenever planning to implement a specific change.
Public agencies are usually established to meet the needs of different people. In every democratic society, public organizations should take into consideration the rights of its citizens. Different constituencies such as parliamentarians, politicians, cabinet secretaries, watchdog groups, non-governmental institutions, and public officers must be allowed to present their viewpoints. A change process that fails to satisfy one of these stakeholders might be extremely hard to implement (Freeman & Siegfried 2015). Leaders in such agencies should consult widely and bring onboard different players to ensure the suggested change is supported. Failure to consider these issues will make it impossible for any change to be concluded successfully.
The unique forces affecting every public organization can be used to explain why some leaders often fail to manage sustainable change processes. Fortunately, many agencies have managed to overcome these hurdles by focusing on the best practices that can result in improved performance (Freeman & Siegfried 2015). Some leaders have known how to consult different players and encourage them to offer meaningful incentives that can deliver desirable outcomes. Freeman and Siegfried (2015) indicate that leaders should use their expertise to minimize crises, bring followers together, and communicate clear objectives that must be realized promptly.
Entrepreneurship Leadership in Public Organizations: Recommendations for Implementing Change
Managers in public organizations can benefit significantly from the core attributes of entrepreneurship leadership. Agency leaders should understand that most of the obstacles affecting public organizations might not go away any time soon (Ward 2017). They should go further to implement powerful initiatives that can minimize the level of resistance and encourage more participants to focus on the targeted outcomes. A competent entrepreneurship leader understands clearly that he or she should incessantly acquire new skills. Proper knowledge of the issues affecting the organization is also critical to come up with a proper change model.
An entrepreneurship leader planning to implement a specific change in an agency should possess certain key qualities. The first critical feature is being able to articulate a proper vision. The manager should be aware of how the intended functions should be completed. The steps or phases to be followed throughout the change process are also necessary (Ward 2017). The major areas causing dissatisfaction in the public organization can be used to come up with the best vision (Freeman & Siegfried 2015). The approach can guide the leader to focus on specific issues affecting the targeted population.
The second issue to consider is communication (Ward 2017). As a leader, it is necessary to share information with different stakeholders, clients, and followers. An informed team will be willing to be part of an agenda aimed at improving performance. Problems or challenges affecting the organization should be understood by every player. An entrepreneurial leader understands clearly that his or her followers can offer valuable ideas to make things much better (Koryak et al. 2015). Constant communication makes it possible for leaders to analyze emerging issues, address every challenge, and minimize conflicts. The concept of teamwork emerges thereby making it easier for the leader to support the implemented change.
Another powerful dexterity associated with entrepreneurship leaders is the ability to retain talent. Ward (2017) believes strongly that successful leaders always surround themselves with courageous, competent, and courageous followers. An entrepreneurship leader identifies individuals who possess specific competencies and encourages them to join his or her team. Proper training is emphasized by such leaders to foster continuous improvement. New resources are usually introduced to support the performance of every employee. Individuals who portray adequate competencies can be selected to mentor and guide others. The created team will then work hard to ensure the intended change is implemented and sustained successfully.
Leaders in public organizations must learn how to lead others by example (Koryak et al. 2015). To achieve this goal, the leader must exhibit appropriate values and ethical practices that can be emulated by others. Every follower will be willing to learn new behaviors and apply them accordingly to support the goals of the agency. The leader should promote collaboration throughout the change implementation process. The use of an appropriate change model will eventually support the process. The ability to empower others and equip them with desirable competencies is another meaningful attribute of entrepreneurial leadership (Ward 2017). Leaders should use their skills to transfer apt ideas and knowledge to their followers. A new culture capable of promoting performance will eventually emerge in the targeted government organization. Consequently, the agency will be in a position to ensure quality services are available to every person.
Entrepreneurship leaders are characterized by persistence. To execute the intended change, and entrepreneurship leader should use a strong vision and apply adequate strategies. Such a leader will go further to seek advice from experts and professionals in the public sector. This approach is necessary because no one knows everything especially in the field of organizational management. The inclusion of different professionals, legal experts, and specialists in the respective sector will make it possible for the leader to implement new changes (Ward 2017). The involvement of every stakeholder in the government organization will create the best environment capable of supporting the change process.
Throughout the change implementation period, entrepreneurship leaders should be keen to monitor the efforts put in place (Freeman & Siegfried 2015). Constant monitoring is used to reveal the major achievements and challenges associated with the process. Short-term initiatives can be implemented during the process to deal with every emerging issue. Additionally, political issues must be considered since they have the potential to affect the performance of a given public organization. New ideas in the field of management should be embraced by organizational leaders who want to implement changes successfully.
Conclusion
Entrepreneurship leadership is a complex approach that can be managers to support change in public agencies. Although many leaders in public organizations encounter several challenges whenever planning to implement deep changes, the model can be applied to deliver positive outcomes (Koryak et al. 2015). An entrepreneurship leader can begin by figuring out how to attract key stakeholders and encourage them to support the intended change. The leader can go further to empower and mentor every employee. The leader must communicate the mission of the change process to every participant. By so doing, the individuals will collaborate in an attempt to deliver meaningful results. Inputs from different stakeholders should be taken seriously by leaders throughout the change process. Such ideas can be used to promote desirable practices and initiatives that have the potential to add value to the organization.
Since leadership is a public organization that can change hands any time, managers should ensure the right groundwork is in place after implementing a new change. This approach will ensure every leader is capable of following every step. The provision of adequate resources and skills to the major players will support the process. As mentioned earlier, continuous learning is a powerful concept that can empower both the leader and his or her followers. The approach will create a positive organizational culture whereby new ideas are exchanged by different stakeholders (Ward 2017). When every person has managed adequately, the outlined vision will become the best guiding principle that promotes new changes in the targeted government agency. In conclusion, a leader who plans to change a public sector organization can learn a lot from the unique attributes of entrepreneurship leadership.
Reference List
Downe, J, Cowell, R & Morgan, K 2016, ‘What determines ethical behavior in public organizations: is it rules or leadership?’, Public Administration Review, vol. 76, no. 6, pp. 898-909.
Freeman, D & Siegfried, R 2015, ‘Entrepreneurial leadership in the context of company start-up and growth’, Journal of Leadership Studies, vol. 8, no. 4, pp. 35-39.
Koryak, O, Mole, K, Lockett, A, Hayton, J, Ucbasaran, D & Hodgkinson, G 2015, ‘Entrepreneurial leadership, capabilities and firm growth’, International Small Business Journal: Researching Entrepreneurship, vol. 33, no. 1, pp. 1-14.
Ward, J 2017, Leadership and change in public sector organizations: beyond reform, Taylor & Francis, New York.
Customer service and its influence on customer care are in the focus of the attention of researchers in many fields. The reason for such focus is clear: an intuitive assumption is that satisfied customers are more likely to stay loyal to the provider of goods or services and thus contribute to the profitability of the organization. The following literature review explores the evidence of the relevance of the approach for non-profit and public administration organizations, reviews the current methods of assessment, looks into the role of IT as a factor, and inquires about the influence of cultural diversity on findings.
Relevance for Non-profit Organizations
Non-profit organizations often ignore the aspect of customer satisfaction. Some of the organizations are misled by the fact that they do not offer a “product” in a traditional sense. Often, their activity includes providing services on-demand, which leads them to a false conclusion that they do not need to seek customer loyalty and, by extension, must not strive for constant improvement (Mueller, 2012).
In other words, the absence of competition leads them to a belief that customer care must only be maintained on the necessary level and does not require improvement unless it is dysfunctional. In some cases, the very notion of a non-profit organization creates a false understanding that the company needs to be as distinctively different from business as possible. Mueller (2012) challenges these assumptions by illustrating the situation as more dependent on customer satisfaction: According to him, the non-profits rely on the three constituencies.
The clients of the organization are to be treated in the same way as the customers of businesses regardless of the amount of money they bring: even if customer service does not produce revenue at all, it still fosters loyalty and guarantees strengthening the image and increasing the inflow of new clients. Second, the donors of the organization are important as a source of financial and material support – and their readiness to provide it is directly influenced by the performance of the organization. Third, the volunteers who are engaged in supporting the organization by investing their time, skill, and effort, are driven both by the company’s image and its performance record. In turn, both of these criteria are visibly influenced by the satisfaction of the clients.
Another common misconception that often hampers the performance of the false identification of the customer and, by extension, of the objective the organization must pursue. This essentially leads to the misdirected effort of fostering the satisfaction of the customers. According to Steve Rothschild, a former General Mills executive who later applied his for-profit expertise to the non-profit sector to show excellent results, the non-profit organizations are misunderstanding their difference from a business by distancing from the marketing techniques (Burbank, 2012).
Also, many of them simplify the picture by treating their immediate clients as their only customers. On the other hand, at least in some cases, the interests of the organization influenced by the actions directed at the client’s by the non-profits are not taken into consideration. This leads to a situation where the clients receive proper service formally but become dissatisfied in the long run since their ultimate goals remain unfulfilled. Interestingly, Rothschild specifically mentions in the interview that his suggestions, especially the ones focused on marketing efforts, are met with criticism, with the most common countering being “That’s business language… We’re here for the social good” (Burbank, 2012, para. 6).
This coincides with the assumptions highlighted above and illustrates the false dichotomy of “selling out versus serving the good purpose.” Another notable aspect suggested by the author is the focus on a single customer to maximize the satisfaction without exhausting the resources (Burbank, 2012) since this element is often overlooked when dealing with the entities not centered on revenue.
Measuring Effectiveness
Despite the recurring tendency among the organizations to ignore the role of adequate customer care and thus fail to improve customer loyalty, the current trends indicate an almost unanimous recognition of its importance among scholars. A growing body of evidence confirms the importance and effectiveness of customer satisfaction and ties it to customer service. However, the findings are not always consistent.
The main reason for this is the intangible nature of the phenomenon. This, in turn, creates difficulties in developing a conclusive method for quantitatively measuring the outcomes and, more importantly, applying the results to fields the framework was not originally designed for. A meta-analysis which aggregated findings of more than 500 correlations of customer satisfaction to the presumable causes such as performance, expectations, disconfirmation of expectations, and affects, produced the results which confirmed the existence of discrepancies (Szymanski & Henard, 2001).
First, the aggregation revealed weak consistency among the findings, although some tendencies were visibly more prominent than the others. For instance, the positive disconfirmation (a situation where customer expectations exceeded the outcome) demonstrated the strongest direct connection to customer satisfaction. At the same time, the relation to successful performance was noticeably weaker. The cumulative analysis further confirmed that performance was not a statistically significant determinant of customer satisfaction (Szymanski & Henard, 2001). Most importantly, the introduction of the multivariate context further weakened the statistical relation of all of the factors.
While these results illustrate the insufficient reliability of the research on the matter and introduce reasons for caution when utilizing them, it is worth noting that the absence of the universally applicable evaluation model is at least partially responsible for lack of agreement among the scholars. It would thus be wise to focus on the specific studies and determine their applicability in assessing customer satisfaction in Dubai courts.
First, it is important to conclusively establish the connection between customer service and customer satisfaction. Although an intuitive approach suggests the direct and immediate causation between the two, the findings by Szymanski and Henard (2001) suggest that at least in some cases the effect is mediated rather than serves as a direct cause. These suggestions are strengthened by numerous separate studies.
For instance, a study by Yu et al. (2014) revealed the following: service quality has a direct effect on perceived value and customer satisfaction; both perceived value and customer satisfaction directly impact the repurchase intention of the customers; at the same time, no direct relationship is established between the service quality and repurchase intention (Yu et al., 2014). This essentially means that despite being interrelated, the quality of customer service does not directly imply the financial sustainability of the organization. On the contrary, the mediating effect of customer satisfaction needs to be achieved to positively ascertain loyalty.
Thus, the importance of monitoring customer satisfaction rate becomes evident. While the authors of the original study suggest monitoring service quality perceptions “to maintain high-quality services, prevent service errors, and promptly solve unforeseen problems” (Yu et al., 2014, p. 765), it is also obvious that without proper monitoring the mediating connection can be disrupted, which will lead to the loss of resources without receiving the desired effect.
Employee’s behavior is also proven to be in direct relation to customer satisfaction. In fact, according to the research by Jamshaid, Qureshi, and Khokhar (2012), employee behavior, in particular, the orientation toward problem-solving, has a direct impact on the customer’s loyalty. At the same time, the fulfillment of expectations that are formed through an advertisement campaign plays an equally important role (Jamshaid et al., 2012).
However, the most important detail found by the researchers is the distinction between the actual fulfillment and the perception of the fact. In other words, while it is important to maintain the standards of service and performance which are expected from the organization, it does not guarantee the satisfaction of the customers unless they perceive the experience as fulfilling. The research does not focus on this aspect and the implications which can be made based on it – primarily because it deals with the correlations of customer loyalty and satisfaction.
However, it is likely that the court system, which is an entity prominent enough to draw public attention, should consider the benefits of including the existing public perception (currently a substitute for a marketing campaign in for-profit organizations) while developing a strategy for successful customer service. As was previously mentioned, in non-profit organizations the possibility of launching a marketing campaign is usually met with serious resistance. Thus, they are often at a disadvantage of being in limited control of their reputation and thus need to at least address it by planning their services to result in conclusions that are recognized as positive by the clients.
The discrepancy between the individual attributes responsible for overall satisfaction is also a matter of concern. As was previously noted, the majority of the studies produce only relatively consistent results. However, even within a single study, the influence of separate attributes may not correlate with the equalized overall satisfaction (Ažman & Gomišček, 2012). In other words, the rates of satisfaction of specific actions by the employees rarely coincide with the general view on the satisfaction with the services.
The study not only confirms the asymmetry but illustrates the degree of non-linearity it conveys. Generally, the levels of reported satisfaction on specific actions of the employees do not correlate with the expressed levels of dissatisfaction with respective actions ( Ažman & Gomišček, 2012). Moreover, none of these specific attributes relate to the overall level of satisfaction (Ažman & Gomišček, 2012). Most notably, the asymmetry is systematic, with dissatisfaction having less impact on the satisfaction when applied to attributes in separation and on the overall impression when aggregated with satisfactory attributes.
This essentially implies that the negative effects, such as unsuccessful fulfillment of expectations, can be effectively mitigated by providing additional sources of satisfaction. Another possible solution is the lack of consistency in the currently accepted satisfaction measurement tools, predominantly questionnaires. In their current form, they are designed to assess satisfaction by receiving feedback on multiple aspects of customer satisfaction.
However, if the asymmetry is indeed the case, this technique can not be safely used to produce meaningful results. It also should be noted that the authors caution against the adaptation of their findings into other fields, as they perceive the particularities of the studied field (automotive industry) to be at least partially responsible for the result (Ažman & Gomišček, 2012). Nevertheless, with proper adjustment and further research, they can be applied to courts in Dubai.
The Role of Information Technology
Finally, an emerging influence of information technology on customer satisfaction should be considered. Gradually more organizations utilize the opportunities it provides to improve communication with the customers, provide them with additional services, such as support, monitoring, logging, and access to relevant databases. Besides, in some cases, including that of the Dubai Courts, the information technologies are used for additional transparency of the operation. All of the mentioned factors are recognized as contributing to customer’s trust, improve the quality of customer care, and, by extension, foster their satisfaction (Chu, Lee, & Chao, 2012).
It was also reported that the appearance and visual appeal of the web-based services cater to the overall customer satisfaction (Chu et al., 2012) (which aligns well with the perceived satisfaction discussed earlier). However, while the benefits of the IT and the technical possibilities it provides are already unanimously recognized, supported by extensive research, and backed by an impressive record of case studies, their influence on customer satisfaction remains under-researched and resides mainly in the speculative domain. This means that the switch to the web-based services is almost inevitable across all establishments, but its actual impact upon adoption is unclear.
There are no known reasons to expect negative outcomes, but the possibility to analyze and predict the effect is still desirable. The PLS structural equation modeling developed by Chu et al. (2012) can be used as one possible solution. By applying the framework to the e-banking setting and integrating social exchange theory, the researchers were able to confirm the strong relationship between the service quality and customer satisfaction and between customer satisfaction and “e-loyalty,” which is loyalty to the particular e-banking services (Chu et al., 2012). While the latter is not entirely applicable to the Dubai courts, the former allows deeper insights into the possibilities provided by the introduction of IT-based services.
Applicability to Public Administration
As was noted above, customer-oriented practices are most common among private business entities. All of the research mentioned above was conducted in such an environment. We also were able to determine that at least some of the discussed findings do not apply to the clients of the courts. Nevertheless, a range of practices that are common in customer service can be applied to the field in question.
For instance, Wagenheim and Reurink suggest that “public administration and the private sector are very similar, especially in the areas of information exchange and delivery of services to the internal or external customer” (1991, p. 263). Furthermore, the authors imply that the internal customers, e.g. employees, usually benefit from the customer service improvements as well. They also provide a framework for redefining the key concepts, which are recognizable in the business world but may be confusing in the field of public administration, such as customers and their needs.
The latter are divided into seven categories, of which three are of particular value for the paper: problem resolution (as correlating to the primary responsibility of organization), the competence of the personnel (considering the amount of responsibility the employees face regarding their clients) and information and communication (which is especially beneficial since most of the information handled in the court is professional enough to create difficulties in comprehension) (Wagenheim & Reurink, 1991).
These suggestions are partially supported by the study by Hu, Cheng, Chiu, and Hong (2011). According to the study, customer satisfaction is primarily defined by the workplace environment, empathy, and employee behavior (Hu et al., 2011).
Interestingly, while the first and third points are relatively visible in all of the reviewed sources, empathy is only present in the more recent ones. This is representative of the common understanding of the situation, where the psychological aspects were previously treated as secondary to the actual competence and efficiency (the view which was proven inconsistent above) and, in some cases, irrelevant.
Another notable finding of the study is the significant negative association between customer satisfaction and customer complaints (Hu et al., 2011). The authors suggest that this relation allows treating the emergence and frequency of complaints as a direct indication of the decreasing satisfaction, which, in turn, provides us with additional means of monitoring the success of customer services and customer care. Finally, the study was performed in a non-business organization, which, while not immediately applicable to the topic of Dubai courts, still strengthens the hypothesis of the relevance of the customer services for the efficiency of the organization in question.
Cultural Implications
Finally, the cultural background needs to be taken into consideration. The diversity of the population in Dubai suggests additional challenges since the multi-cultural environment implies greater diversification of customer needs and expectations dictated by varying cultural backgrounds. It is thus important to define whether the previously determined individual attributes apply to such an environment.
A study by Voon, Douglas, and Singh (2012) was conducted in Malaysia, a country with similarly high diversity. The findings indicate the same determinants, including empathy and employee competence. It is also worth noting that empathy is determined to have a “significant and positive influence on all the variables (customer satisfaction, communication effectiveness, trust, and customer loyalty)” (Voon et al., 2012, p. 304).
In our case, communication effectiveness was previously defined as an important mediating attribute responsible for customer satisfaction, which makes all three attributes relevant to the study. Thus, we can make a preliminary assumption that the same factors will likely be responsible for customer satisfaction in Dubai despite its cultural diversity. Nevertheless, an adjustment may be required before these findings are used to conclude, and separate research is desirable to account for the current factors which are either overlooked or may have emerged in the highly dynamic cultural environment of the UAE.
Conclusion
The reviewed literature allows us to conclude that customer service and care has both a direct and indirect relation to customer satisfaction. The findings by other researchers suggest the relative applicability of these notions to the characteristic features of the Dubai courts.
It is thus necessary to confirm the immediate applicability of these results by researching the effects of customer service and customer care on customer satisfaction in Dubai courts, which represent an environment different to at least some extent from those reviewed above.
References
Ažman, S., & Gomišček, B. (2012). Asymmetric and nonlinear impact of attribute-level performance on overall customer satisfaction in the context of car servicing of four European automotive brands in Slovenia. Organizacija, 45(2), 75-86.
Chu, P. Y., Lee, G. Y., & Chao, Y. (2012). Service quality, customer satisfaction, customer trust, and loyalty in an e-banking context. Social Behavior and Personality: An International Journal, 40(8), 1271-1283.
Hu, H. Y., Cheng, C. C., Chiu, S. I., & Hong, F. Y. (2011). A study of customer satisfaction, customer loyalty and quality attributes in Taiwan’s medical service industry. African Journal of Business Management, 5(1), 187-195.
Jamshaid, M., Qureshi, T. M., & Khokhar, S. Z. (2012). Mediating role of employee’s behavior to build customer loyalty through customer satisfaction. African Journal of Business Management, 6(45), 11152-11160.
Mueller, K. (2012). Why customer service is important for nonprofits. Web.
Szymanski, D. M., & Henard, D. H. (2001). Customer satisfaction: A meta-analysis of the empirical evidence. Journal of the Academy of Marketing Science, 29(1), 16-35.
Voon, B. H., Douglas, A., & Singh, B. (2012). Serving The Local Community Customers: Evidence From Multi-cultural Malaysia. International Journal of Business and Society, 13(3), 293-308.
Wagenheim, G. D., & Reurink, J. H. (1991). Customer service in public administration. Public Administration Review, 4(1), 263-270.
Yu, H. S., Zhang, J. J., Kim, D. H., Chen, K. K., Henderson, C., Min, S. D., & Huang, H. (2014). Service quality, perceived value, customer satisfaction, and behavioral intention among fitness center members aged 60 years and over. Social Behavior and Personality: an international journal, 42(5), 757-767.
Social Enterprise for a day is a two-day conference that teaches students the importance of corporate caring. It is a core component of the introduction to entrepreneurship course. This year, the event took place at Mount Saint Vincent University and was held on Thursday 30th January, 2014, and Friday January 31st, 2014. The event brought together students from Mount Sinai Vincent and Dalhousie Universities. Together, we brainstormed ideas on how to plan and run social ventures.
Summary
The event started with an introductory speech on social enterprise by Dr. Peter Mombourquette. In his speech, Dr. Mombourquette noted that students can put their entrepreneurial skills to good use by improving the local community. Four entrepreneurs were also introduced and each one of them gave a speech on the experiences of an entrepreneur. Besides recounting how they had ventured into entrepreneurship, the speakers also highlighted the lows and highs of venturing into the business world. In addition, the entrepreneurs shared with the students useful guidelines on starting a business. Some of the important keys to business success that the entrepreneurs highlighted include: need identification and developing cordial relationships with your customers.
Later that evening, the Hope Blooms team, a group of successful entrepreneurs, were invited on stage to share their experiences and insights on social entrepreneurship. Hope Blooms are involved in the manufacture and sale of salad dressing and because the business is a social outfit, the entrepreneurs use most of their profits to organize cooking classes, fund scholarship classes, and neighbourhood gardens. The students were impressed and motivated by the testimonies given by the Hope Blooms team. Students from Mount Saint Vincent University also promised that they would give the profits generated from their business venture to Hope Blooms.
Once the speakers were done with their speeches, the students were divided into thirteen groups. Each of the thirteen groups was to develop a business idea which would be presented to the panel. Our group consisted of thirty two members. We brainstormed for about 1 hour and came up with the idea of selling Hand Warmers with suckers. Our individual investment would be $ 5 meaning that as a group, we would have to raise $ 160.
We compared the prices of hand warmers from different stores such as Canadian Tire, Wal-Mart, and Dolaram. Eventually, we decided to buy from Wal-Mart because the store had the cheapest prices. A pack of ten pairs of hand warmers was retailing at $ 9. We decided to sell a pair of hand warmers and a sucker for $ 2. Therefore, for every $ 9 invested, we would make a profit of $ 11.
Our selling point was strategically located near the Halifax public garden, Scotia square, The Emera Oval Public Skating, professional centre, and on Spring Garden Road at the entrance to the public library. The following day, we advertised our products on posters with the message: “Warm Your Hand, Warm Your Heart. All profits go to Hope Blooms!! Mount Saint Vincent University”. Our group was assigned the location next to Starbucks and near the professional centre.
This proved to be the best location as we sold 30 pairs of hand warmers in one hour. We made a profit of $ 72. We also assisted the other group sell their products at our location because there was less traffic at the Halifax public garden where they were stationed. As a group, we made a net profit of $ 306.
Lessons Learned
Our business venture taught us valuable lessons in entrepreneurship. One of the lessons that we learned was the need for teamwork as it is very difficult to succeed alone. The experience also taught us the importance of asking for help. For example, the other group was not doing too well with their sales and had to request for our help. Team members had to align their individual efforts for the greater good of the team. This taught us the importance of location in business.
We learned that hard work pays, and that although there are numerous challenges that are likely to face a business, we should never give up. We also learned that in business, nothing ever goes according to plan and as such, it is important to be flexible. Resilience is also an important character trait of an entrepreneur, as the dips and setbacks of a business venture are part of being successful.
How these lessons will help future entrepreneurial pursuits
The lessons that we have learnt from our business venture would be of immense help to future entrepreneurial pursuits because we now know where to turn for help. These are the entrepreneurs who have been there, and done that. We also know that entrepreneurship is all about taking risks, and that we should not be daunted by setbacks as they are part of the entrepreneurial journey.
Conclusion
The event was both a success and an eye-opener. We got to hear first-hand testimonies and experiences of successful entrepreneurs. We benefited from tried and tested tips on entrepreneurship by successful business personalities. The experiences also taught us that entrepreneurship is not just about making a profit and keeping it; giving back to the community part of that profit is equally important.
Newborn mortality is a big problem that is especially relevant for countries in the developing world. It kills millions of children every year, a significant portion of whom die because of hypothermia. Embrace is a non-profit social enterprise that is based in India and works in that country and other emerging nations that are faced with the problem of high infant mortality rates. The goal of the company is to reduce child and maternal deaths by providing low-cost portable incubators for babies in rural areas.
Embrace was created in 2008, and in 2012 founded Embrace Innovations to earn income by manufacturing and distributing warmers that regulate the temperature of premature infants. In addition to its main activity, the company cooperates with other non-government organizations working in developing nations, providing them with support and training.
The fact that in order to successfully function in the market, any social enterprise needs to find a balance between its financial and social mission leads to a necessity for trade-offs (Rory and Bull 19). One of the main challenges that are experienced by Embrace is a necessity to compromise between the affordability of their incubators for clinics in poor regions and the quality of the product. To handle this issue, the company is focused on developing new cost-effective technologies and keeping the product design low-cost and simple.
The social enterprise uses portable warmers that are completely safe, reusable, and do not require a constant connection to electricity, which is especially important for emerging markets. Thus, by creating and distributing cheap and effective healthcare solutions for infants, the company makes a significant positive impact, helping reduce infant mortality and improving quality of life for thousands of vulnerable people in the developing regions.
Another trade-off that is critical for this social enterprise is the balance between non-profit and for-profit parts of its hybrid stricture. To solve this problem, Embrace and Embrace Innovations are created and run as separate but closely interconnected organizations. Embrace distributes its products free of charge to government and private hospitals that cannot afford to pay for them, whereas for-profit Embrace Innovations conducts manufacturing and commercial distribution of warmers at an affordable price and works with communities that can pay for them. The non-profit side owns the intellectual property for all products and receives royalty payments for every sold warmer.
This approach provides financing for not-for-profit activities with the revenues from selling products. Combining two different methods of distribution, and, thereby, substantially broadening the range of regions and demographics that are influenced by the activities of the enterprise, the company reaches to more people.
Green Monday
Green Monday is a multifaceted social enterprise whose main objective is to fight climate change. The organization was created in Hong Kong in 2012, and it consists of a non-profit social branch that runs educational and public campaigns and multiple venture branches. Green Monday advocates the idea that healthy eating and vegetarianism help fight climate change by reducing livestock. The meat-producing industry is currently responsible for the emission of substantial amounts of greenhouse gases, and, thus, promoting vegetarianism will reduce the negative effect that humanity has on the planet. Venture branches of Green Monday together are aimed at providing a one-stop solution that combines a plant-based restaurant with a supermarket.
The balance between price and quality of food is a major trade-off for this social enterprise. The fact that the company is focused on health, organic and eco-friendly food technologies increases the cost of their products, leading to higher retail prices. This tendency negatively affects the ability of low-income customers to buy Green Monday products, contributing to inequality and making healthy eating available only to wealthy people.
Fighting this problem requires the adoption of new innovative techniques that help reduce costs and increase productivity without compromising the quality of food and damaging the environment. Developing balanced approaches to business and extensive use of innovations might allow the social enterprise to provide eco-friendly and healthy products that are affordable to all people. Such a company can make a difference in the world by promoting social good and equality, healthy lifestyle choices, and care for the environment.
Another important trade-off regarding the business model of Green Monday is the necessity for a compromise between social and venture branches of the enterprises. Educational and social programs to promote vegetarianism and healthy eating and other public activities that are created and run on a not-for-profit basis require financing. Commercial entities that comprise the venture branch of the organization create a stable stream of earned income that provides financial resources for the social enterprise. In addition to that, Green Monday collaborates with other companies to facilitate the promotion of its values among people.
For instance, the company encourages restaurants to create additional vegetarian and vegan menu in order to increase the accessibility of plant-based food and promote sustainable eating choices. Combining commercial activities and not-for-profit programs allows developing of new effective approaches to environmental and public problems, which is essential for a successful social enterprise working in that area.
Work Cited
Ridley-Duff, Rory, and Mike Bull. Understanding social enterprise: Theory and practice. Sage Publications Limited, 2019.
Social enterprises are organizations and/or businesses that provide products and services with the goal of promoting the development of the social economy. This suggests that the organization’s main objectives are fundamentally focused on enabling society by developing some practical ways to alleviate the issues the neighborhood is experiencing. The majority of social enterprises, in general, fall into one of three categories: business-oriented, social ownership-based, or social aim approaches. The routine process of producing goods and distributing them to the market as services is essentially what is meant by the term enterprise oriented.
Asian Paints, the company was established in 1942 as a partnership firm by four friends, Champaklal Choksey, Chimanlal Choksi, Suryakant Dani, and Arvind Vakil. It became India’s leading paint company for more than 25 years. Aside from providing a range of paints for both decorative and industrial use, wall coverings, and adhesives, they are also active in the home improvement and décor industries and even offer bathroom and kitchen products. Additionally, the business produces, markets, and distributes paints, coatings, items for the home, toiletries, and services associated with these industries (Wheelen et al., 2018). Asian Paints has developed significantly since its founding in 1942 to become the leading company in India and the third largest company in Asia. Recently the company has been undergoing challenges caused by customers’ complaints.
Pricing Strategies and Marketing Mix
Asian Paints uses effective pricing strategies to increase sales. Along with the goal of maximizing profits, it has other considerations when determining prices for goods and services. It considers important factors in pricing strategies which include financial security, brand recognition, and corporate identity. With the recent issues of customers’ complaints about the paints, the manager clarified their pricing. Market penetration pricing, premium pricing, bundle pricing, and economy pricing are typical pricing tactics. Product, price, place, and promotion make up the marketing mix, also known as the four Ps (Scarborough and Cornwall, 2019). The company promotes the business by offering extra services to their customers. It offers services to keep its clients and maintain a sustainable demand to remain among the leaders in its market segment. Considering the customer complaints about some of our products they considered talking to all suppliers of their products and agreed on the measures they would need to reduce the complaints.
Benefits of Social Responsibility
A social responsibility framework holds individuals and organizations responsible for upholding their civic duties and carrying out actions that will benefit society. A business or person is thought to be acting socially irresponsible if they violate social norms or ignore common values (Hosta and Zabkar, 2021). This theory contends that managers must put an equal amount of effort into maximizing profits and safeguarding the interests of the neighborhood and society. Its advantages include improving internal culture, boosting client loyalty and advocacy, enhancing brand recognition, giving a company a competitive edge, attracting top talent and boosting retention, and making a business more appealing to investors.
Quality Measures to be Adopted
When attempting to boost sales and keep clients, customer satisfaction is crucial. A successful company should prioritize this factor to entice repeat business. Keeping customers satisfied is a crucial tasks business should promote (Sudari et al., 2019). Relevant strategies for ensuring client satisfaction include increasing annual revenue, reestablishing a favorable reputation through reviews and recommendations, competing in the market, lowering the cost of acquiring new customers, and increasing customer retention rates. Gaining client trust is a critical objective for any business.
Sources of Finance and Service Range
Due to its unique organizational structure, Asian Paints raises its money through grants and investments. Additionally, foreign partners, presented by fashion, constructions, and some other brands and known as angel investors, are interested in investing money in the business (Bonini et al., 2018). Companies that provide startups with seed capital are known as seed funding firms. Organizations called venture capital funds to pool large sums of money and invest it in new businesses. New products will be created as the company sells out of its current offerings. The company’s financial stability also has a great impact on the quality of manufactured products. Table 1 demonstrates the percentage of money Asian Paints acquired from investors and grants.
Table 1. Source of finance in percentage.
Source of finance
Amount in %
Grants
30%
Angel investors
45%
Start-up capital
25%
Product Portfolio
Product portfolio analysis aids management in choosing where to invest important resources. A happy customer is loyal, and in the product portfolio management process, this should be taken into account. The Asian Paints Company has to resolve the issues their customers complain about since this largely affects their production and supply. The business offers affordable products to ensure a stable demand in the future. Asian Paints achieves the following objectives through product portfolio management: checking the product’s performance, increasing efficiency, and expanding the assortment. By monitoring market trends, the business can better recognize customer needs and adapt to changing market trends and assemble data. As a result, communication between teams and departments is improved.
Product Extension Strategies
An extension strategy is a tactical solution used to boost a product or service’s profitability to keep it out of decline and in the maturity stage of the marketing product lifecycle. Some extension strategies include rebranding, providing discounts, and looking for new markets. Rebranding is the process of changing the appearance and feel of an existing product to set it apart from the competition (Gizem, 2022). Creating new shades of paint is also a mechanism for ensuring the company’s expansion. One can use the colors available by mixing them to create a new shade.
PESTLE Analysis
A tool for getting a comprehensive picture of the business environment is PESTLE analysis. Factors related to politics, economics, society, technology, law, and the environment are collectively referred to as PESTLE. It enables a business to comprehend the elements that may have an impact on a new market or industry. This analysis will assist in identifying risk factors because various criteria may be valued distinctively. A company can decide on how to carry out its operations after performing this analysis. Table 2 shows how these factors affect the business.
Table 2. PESTLE analysis in percentage.
PESTLE Analysis
% Representation
Political analysis
20%
Economic analysis
25%
Social analysis
5%
Technological analysis
30%
Legal factors
20%
Political Factors
The political section provides information on the political system and the major players who are important to the country’s business operations. With a number of economic issues, such as poverty, which is thought to be a result of government actions, Asia’s political system is unstable (Kruse, Wach, and Wegge, 2020). The tax rates vary widely with the lack of structural adjustment policies from the government (Yershova, 2018). Recently, the international monetary funds and the World Bank have designed structural adjustment policies for the Asian government to encourage successful development.
On the other hand, when analyzing the economic and political statistics of Asia, this is evident that it stands in a better place compared to other nations in relation to economic and political stability. Asia is a nation that best fulfills the demands of a prosperous life. It grants preferential tariff rates for the members of the European Free Trade Association through either a membership or having a signatory. Therefore, this will be easy and effective for Asian Paints to expand its operations in Europe.
Economic Factors
These include elements that have an effect on customers’ disposable income and spending patterns. Due to poverty as a common social phenomenon in Asia, the local population would prefer cheap products that would meet their level of income. Thus, this would be challenging for such a business as Asian Paints to set up a supermarket chain in conditions of the existing market problems related to the population’s poverty level. Therefore, the company’s management should pay more attention to the economy in general and not only the company’s current assets.
Social Factors
The social part enables an understanding of consumers’ demographics based on income distribution, rural-urban segmentation, and educational scenario. Population growth, age distribution, health consciousness, career attitudes, and other factors are among them. These elements are particularly important because they directly affect how marketers perceive customers (Backer, 2019). For instance, Asia has made great strides in the improvement of education and literacy rates over the last years.
Technological Factors
The technological factors section provides strategic information on technological laws and policies, innovation gaps, and patents within a given country. Since India has a developed IT market, Asian Paints can adapt available developments in its operations. At the same time, the company’s business should pay particular attention to business administration as a process that allows for combining the necessary areas of work with optimization tools (Shang, 2020). Otherwise, the risk of losing a competitive advantage arises due to slow innovation.
Legal Factors
The section provides information on the legal structure, tax regimes, and the laws to begin a new business in a given nation. The legal dimensions of a specific environment affect business practices. The laws that might affect the business in question are associated with consumerism, employee relationships, and competitive practices. Some regulations should be viewed from the perspective of various agencies, including environmental protection agencies, equal employment agencies, and others.
Sources of Information
Various data collection techniques were utilized to gather the necessary information. The research was mainly carried out through interviewing involved stakeholders, observing social enterprise establishments, and reviewing secondary materials, such as articles, journals, and other academic publications focusing on social enterprises in and outside of Asia. After the interviewing process, a feedback report was obtained. Selecting the respondents was based on such factors as the age and social class level to assess different cultural perspectives and opinions of the social enterprise sector in the country.
One-on-one conversations were utilized as the main instrument of communicating with the stakeholders. As a supplemental analytical technique, analyzing the respondents’ facial expressions was used. This is a convenient practice that may help obtain unbiased answers even without asking (Calvo Martínez et al., 2019). The data was credible because most of the people who answered the questions were users of these paints, employees who worked in the company, as well as suppliers. Most of them had interacted with the product and services offered by Asian Paints.
Fayol’s Principles of Management Theory
In the early 1900s, big organizations, such as manufacturing plants, had to deal with critical management issues. Only a few management tools, models, and techniques were accessible at the time. Henri Fayol was among the first to lay the first bricks of contemporary scientific management. The foundational elements of effective management are these initial ideas, also referred to as management principles. Henri Fayol conducted a thorough investigation into this and came up with a summary of the 14 management principles. They included accountability, authority, work division, order, equity, stability in the length of an employee’s contract, initiative, esprit de corps, putting team interests ahead of personal ones, discipline, command cohesion, centralization, direction, and compensation. In the Asian Paints Company, the manager uses these principles in their day-to-day operations. They divide the work among the employees and make sure there is equity among the members of the company.
Scientific Management Theory
The first person to advocate scientific management, known as Taylorism, was Frederick W. Taylor. To boost productivity, he employed scientific techniques to analyze the most effective production process. According to Taylor’s scientific management concept, the optimal production framework ought to be implemented at the place of work to achieve maximum economic efficiency (Ridley-Duff and Bull, 2019). He came up with four principles: first, pick methods based on science rather than common sense. This is rational to use the scientific technique to find the best way to complete a task rather than allow each employee to follow their own strategy. Secondly, this is essential to give employees jobs that are a good fit for their abilities. Instead of assigning workers to open positions at random, managers should determine which employees are the most qualified for each specific job. Thirdly, monitoring worker performance helps make sure that employees assess their productivity and can count on additional training as required. Finally, distributing the workload between managers and employees equally contributes to minimizing the work burden and uniting the team.
Recommendations
One of the major misrepresented or misunderstood facts about Asian Paints is that the business is not making any profit gain. This has mostly affected the company in the sustainability of competitive advantage over other business rivals. The company is recommended to offer discounts to their customers to regain and maintain their trust again. Asian Paints also needs to talk to all its leading suppliers of their products across the countries to make sure there will be no more complaints about their products. As stated earlier, financial sustainability can be considered one of the main challenges that many organizations face when trying to deliver quality services and products.
It is recommended that both the local and federal governments should be able to implement policies and plans to provide the necessary support. According to the research, other business sectors are offered more privileged financial support. Social enterprises, in turn, face financial risks, and in some cases, they lack the required moral understanding and recognition of corporate social responsibility. With regard to the issue of customers complaining about the quality of service offered by the company, the Asian Paints administration should organize at least one meeting with all the staff to talk to them about the way they handle their customers. A new way of producing products may be offered, with a particular focus on how to produce their goods more effectively and how to gain their customers’ trust to ensure a sustainable demand and profit.
Conclusion
In summary, despite some remarks encountered during the interviews, the participants have left satisfied with the attempts to help the community develop. The misrepresentation of the social enterprises is another issue that has influenced the income generation of the companies, which, in turn, has resulted in the stagnant growth of the sector. The government has a vital role in creating and implementing better plans and policies that will promote the adaptation and growth of social enterprises in Asia. Through this, the Asian governments will also improve the entire economy’s sustainability by allowing the injection of more resources back into the community and/or social welfare.
For a social enterprise to carry out its day-to-day operations, it should have a stable financial record. This would help a company to carry out their operations smoothly. There would be no point where the business would want to stop running due to its financial issues. With regard to Asian Paints, the government should have lower tax rates on this company’s products so that the business could count on a good profit gain. On the issues like customer complaints, it was found that most of those clients complaining had bought their products from a particular store. The performed analysis has contributed to identifying the major directions to develop and the main activities to optimize to overcome the existing barriers and maintain competitive advantage.
According to Price (2008, pp 1), “social enterprises are businesses with primary social objectives whose surpluses are principally reinvested for that purpose in business or in the community, rather that being driven by the need to maximize profit for shareholders and owners.”
Social enterprise is mainly associated with non-profit organizations, mainly privately owned, which sell goods and services with an aim of yielding a return on investments, with the accumulated profits being ploughed back into the business or they are directed to social purposes.
The profits of these organizations are not maximized to benefit the shareholders. In addition, social enterprises may be developed with an aim of fulfilling needs that are rare, such as providing employment to the less fortunate communities and the disadvantaged individuals. Such groups of people include the disabled, low education candidates, and ex-offenders, among others.
These social enterprises also operate in the less attractive locations for other businesses; such places include locations with low level of education, rural areas, and social housing areas among others.
Social enterprise activities mainly revolve around the developing of countries, and they include recycling, renewable energy, and fair trade. Social enterprise mainly aims at the social challenges of poverty, unemployment, disablement, and underdevelopment, which may occur in some locations and communities; they address such challenges via aid and social work (Kerlin, 2009, pp xiii).
Just like other businesses, social enterprises compete in the market, but the difference comes in where profits made are reinvested in social activities. Social enterprises are also viewed as a response that is innovative and is directed into funding socio activities by the non-profit organization (Nyssens, et al, 2006, pp 4).
According to Kerlin (2006, pp 249), social enterprises are characterized by the continuity of producing goods and services, the aim to benefit the community, low amount paid in terms of work, the initiative to take up risks, and the limitation of profit distribution.
Kerlin (2009, pp 6) further explains these characteristics; first, the continuity of producing and selling of goods and services, with the social enterprises being known for their productivity of goods and services. Secondary, high degree of autonomy involves their creation by a group on individuals who govern these enterprises and they are not controlled by the government; hence, they make their own decision.
Thirdly, the important level of economic risk allows their employees to determine their financial stability by how well they secure sufficient resources. In addition, the minimum amount of work that is paid shows that most of their workers are volunteering while only a small portion of them are fully employed.
Their aim to benefit the community entails serving of specific people in a community and promoting social responsibility.
Moreover, these enterprises represent an initiative formed by a group of people with the same aims and objectives, while the decision-making process involves voting, thus incorporating all ideas of the stakeholders. Lastly, the limited issue of profit distribution requires that profits be distributed on limited basis with the aim of minimizing profit maximization motive.
The impact of social enterprises on the society
Despite social enterprises playing a major role in the employment of the less-advantaged groups, in some countries like the United Kingdom, it lacks full control of this factor. According to survey, only 2% of the United Kingdom population is employed by the social enterprises. However, this could be due to the fact that the social enterprises pay less as compared to the public sectors.
Nevertheless, these enterprises contribute greatly to the marginalized communities and groups of people (Teasdale, 2010 pp. 95). Teasdale (2010, pp 101) further explains that social enterprises can be of various purposes including providing a social space for the marginalized groups of people such that they are able to develop bonds with others who have a similar situation as theirs.
An example of supported housing enterprise is in the United Kingdom whereby the enterprise accommodated those who suffered from bipolar, as one of the victim shared that he feels much safer at the center other than in the community as he is always harassed and he had no close friends.
When he compares his life in the supported housing enterprise, where he is able to make friends and bond, he feels much safer since there are people with similar situation as his who love and understand him. Hence, this enterprise is a perfect example of a social enterprise from the marginalized groups of people.
Individuals are excluded from activities in the community but are included socially in a group. For instance, a person who has relied on the state’s benefit for some time and then he is finally excluded from such benefits, but within a community enterprise, he is not excluded and was involved even in decision making. Such a person will feel less isolated in the community enterprise as compared to his country.
These enterprises have an aim of creating a paying employment, this is evidence in the case of community times a social enterprise in the United Kingdom that provided employment with a salary to the management team of the organization. Social enterprises involve hierarchy decision-making, tending to fill in, in terms of goods and services, where the state has failed.
Therefore, it is evident that a social enterprise is business aimed at changing the society for the common good. An evident case is that of China, where, despite the social entrepreneurs investing in two projects, they never aimed at profit maximizing, but rather, on strategies that focused on the community (Gunn and Durkin, 2010, pp67).
Social enterprises mainly focus on social responsibility; this is evident when they take up the role of rehabilitating offenders, in which they change the lives of such people for the benefit of the society, since the rate of crime will reduce.
According to Myers and Stocks (2010 pp 267), “the social economy encompasses a range of non-profit and social enterprise organizations that put people before profits, by solving social needs rather than amassing financial profits.” This statement makes it clear that social enterprises sacrifice their private aims and objectives and focus on social needs of the communities.
According to newstatesman (2002, pp ii), social enterprises are seen as organizations that are neither answerable to the government nor have an aim of profit maximization.
This article further explains that the social enterprises are mainly concerned with quality of life of the common people, which involves health, conducive environment, and opportunities for a better education among others. This is summarized by newstatesman (2002, pp. vii) by stating that, “social enterprises are hybrids mixing social values and goals with commercial practices.”
This is evident as they prove to be unconstitutional, as their main driving force are social goals, which include provision of education, support to the incapable families and childcare support; however, to attain such goals, they have to participate and compete in the market through selling their goods and services.
An example can be extracted from the furniture resource centre located in Liverpool, which has a workforce of one hundred and fifty repairing and selling furniture. This business not only sells its products, but it creates a common good to the society by providing employment.
The main aim why the social enterprises make profits is to attain independence and avoid relying on government for support. They therefore focus on communities and customers who have been shunned away by the government.
According to Munoz (2010 pp 59), Tommy Hutchinson made an impact on the society and on social entrepreneurs when he implemented an online social network company named i-genius which operates in over 90 countries.
The network is involved in collaboration of social entrepreneurs and non-governmental organizations; this way, the social enterprises can make international impacts through this website. Using internet, social enterprise is deemed to grow, as the internet creates social collaboration.
According to Leadbeater (2007), the social entrepreneurs had no name ten years ago, but today they are recognized due to their effort to accommodate the written off and laid-off people from schools and workplaces. He further explains that this sector has provided over 40milion employment opportunities and 200 million volunteers worldwide.
For instance, in the United Kingdom, the government created a legal entity, which is the community interest company aimed at incorporating those enterprises that direct their profits to social activities. Social Corporation’s main role is to enhance social entrepreneurship, which entails smoothening the way for employment of the deprived groups and promote training and education (Thomas, 2004, pp 251).
It is evident that a social enterprise consists of corporate social responsibility in its operations, in which social responsibility is the commitment of an organization to improve the well-being of a deprived community via business and social practices; such practices may range from health care to education (Kotler and Lee, 2005, pp 3).
Organizations are expected to impact the society and the communities positively with their activities that are directed towards the welfare of the society and further assume responsibility (Sims, 2003 43).
Therefore, corporate social responsibility entitles one to being a steward of the society’s needs; therefore, it is clear that the social enterprises engage fully in social responsibility unlike other organization who engage partially to the community’s responsibilities.
According to Munoz (2010, pp 30), social enterprises are striving to reach out to the international communities; this is evident in regard to the green work organization which has aided countries like Sudan, Ghana and Sierra Leone among others.
This has left a positive effect worldwide and promoted social responsibility. Social entrepreneurship arise from social enterprise; its main aim being the provision of solutions and aid to social problems facing the society (OECD, 2010 pp 188).
Major achievements of social enterprises
According to Kerlin (2009 pp 76), social enterprises in South Asia have been a major aid to the Asian poverty problem which affects approximately 50% of the Asian population. The corrupt government rarely focuses on eradicating poverty; rather, it enhances unequal distribution of resources.
However, social enterprises have focused on poverty eradication and creating jobs in Asia. One example of such an enterprise is the La Frutera Corporation whose operation involves a banana plantation and work with an aim of improving the quality of lives in the Philippines.
The Maireang farmer’s group involves the poor and landless farmers in Thailand and engages them in the processing of rubber, hence increasing the farmers’ income. According to Yunus (2007 pp, 3), poverty around the world is usually uneven, such that, some communities suffer more than others do.
Relying on the government can be frustrating sometimes; this is because it is slow in acting, hence leading to the emergence of non-profit organizations mainly concerned with the welfare of the needy and desperate. However, theses charitable organizations rely on donations and if the donations cease, they are incapable of assisting the needy.
The author adds that in countries like Bangladesh, where social needs are on high demand, when there are no sufficient donors, some social needs are not catered for at all.
According to Kerlin (2007, pp 77), some of the social enterprise like the entrepreneurs school of Asia promotes entrepreneurial education in which students are molded into becoming social entrepreneurs who focus on profit in business, as well as social impact to the needy communities. The mirror foundation in Thailand enhances education to the remote areas.
Challenges faced by the social enterprises
According to Kerlin (2006, pp 259), social enterprises face challenges just like other organizations and businesses. For instance, in the United States, social enterprises challenges have been identified that include, “exclusion of specific groups, the weakening of civil society and lack of government involvement” (Kerlin, 2006, pp 259).
The author further explains that social enterprises may be leading to the rising rate of exclusion of the marginalized groups.
For instance, in the United States, members of the enterprise are required to pay a certain fee, however, some of the poor beneficiaries cannot afford to pay, hence being excluded from receiving any benefits. Secondly, some of the social enterprises generate a lot of profits, thus they concentrate more on their clients rather that on the social responsibility for the communities.
Thirdly, social enterprises are seen as a potential risk to the civil society in that, these organizations might abandon some programs such as the volunteer programs due to the demand in other practices. These enterprises may also stop relying on donations and volunteers, hence diminishing the aims of promoting social capital.
According to Kerlin (2006, pp259), Western Europe faces the challenge of limited number of services that are supported by the enterprises as compared to the United States, hence, these social enterprises end up being underutilized. According to Leadbeater (2007), many social entrepreneurs run small firms hence limiting the spread of such schemes. Some lack managerial skills, which are relevant in the growth of an organization.
According to Ducci et al (2002 pp 79), social enterprises faced a number of challenges in France, among them being the incapability of creating an organization with many stakeholders, the difficulty in engaging in economic activities for the social enterprises, and the impossibility of the social enterprise to acquire capital.
According to Marks and Hunter (N.d, pp 7), social firms aimed at reaching out to the needy such as education and health care face a range of queries when it comes to their stability, continuity and their sustainability due to the uncertainties that face them.
When a non-profit organization seeks to establish itself, it is faced by a major challenge of distraction from the charitable objective, such that the organization may end up operating like a normal business by loosing focus of its main mission, which is charity (Crutchfield and Grant, 2008, pp 74).
The Social economy in relation to social enterprise
Social economy is referred to as a part of the economy that is not public or private; it consists of non-profitable organizations inclusive of volunteers whose activities are aimed at a community benefit, for instance, for the deprived groups in the society.
The social economy mainly consists of three sub-sectors; the voluntary sector which consists of organizations that govern themselves and do not rely on the government, operate without a profit maximization motive and involve in volunteer work mostly. Such organizations may include charities.
The second sector is the community sector in which these organizations depend on voluntary and do not pay for these efforts, as they are small support groups. Third is the social enterprise sector that involves businesses whose objectives are to support the community and not on maximizing profits for its shareholders (Social Economy, 2011).
In Northern Ireland, the social economy employs approximately 48,000 workers, while in the European Union, a total of 10 million people are employed. This sector can be differentiated from other sectors through its non-profit aim, the low wages and the voluntary services, its involvement with the community and its reinvestment in profits as opposed to sharing it out to the stakeholders.
Nevertheless, the social sector outweighs other organizations through the following advantages;
they are normally situated near their customers, and hence respond fast to their clients needs.
They have the capability of reaching out to the deprived groups in the society.
Due to their charitable work, they attract many charitable organization and volunteers who come to their aid in terms of money and labor.
Since their existence, they have contributed to social capital in the country (Social Economy, 2011).
The main aim of the social economy enterprises is to provide a quality life to individuals and the economy at large; hence, they aim at promoting mutuality, equal opportunities, worth employment opportunities, co-operation, and social benefits to the communities among others.
In addition, these social economy enterprises operate under the influence of social aims, which vary from training, job creation, and provision of services among others.
Secondly, they are involved in the production of goods and services in the competing market, hence benefiting the communities through the acquired profits. Therefore, social economy consists of the charitable sector, non-profit sector, and the voluntary sector (Uluorta, 2009, pp14).
Critics associated with social enterprises
According to newstatesman (2002, pp iii), “social enterprises are seen as a government device to open avenues for local authorities to contract out services such a childcare, leisure and transport.”
However, social enterprises are a savior to many as they take up the “left overs” from the government, such as, the laid off employees, neglected citizens and the marginalized communities, thus remodeling them to being better off. According to Leadbeater (2007), social entrepreneurship is seen as a fake idea and that has developed to its capability to adapt and due to its ambiguous nature.
Recommendations
Social enterprises that are successful should aim at promoting productivity and competition in the operating environment. They should also be able to create wealth socially and promote co-operation and cohesiveness in the community. Social enterprise should work towards developing a new way of operating in terms of delivering of goods and services.
Nevertheless, social entrepreneurs should ensure that their enterprise is leaving a positive impact on the community by enhancing their mode of living. A social enterprise should be aimed at developing the potential of the deprived groups, either by providing employment to them or training them into managing their own businesses.
In addition, an effective social enterprise should be competitive in order to enable its survival in the market by attracting several customers. Finally, social enterprises should enhance delivery of public services by collaborating with the government in areas such as health sector, recycling, adoption, and transportation among others; therefore, social entrepreneurship should be promoted in all countries.
Conclusion
Social enterprises are key players to social responsibility worldwide; therefore, this sector should be supported by the government with no strings attached. This way, they can continue enjoying their independence and at the same time have enough funds to support the less fortunate in society. Social enterprises lead to social entrepreneurship, which aims at providing innovative solutions to unsolved problems in a society.
Hence, it is more concerned in alleviating problems other than maximizing profits. Therefore, with social entrepreneurship in place, deprived communities and marginalized groups are well catered for and have a place to call home.
The social enterprise topic seems like a narrow subject, but it has really challenged me due to its depth and content, hence leaving me thirsting for more knowledge. It is however, an important discussion with a variety of references and during my assignment, I have learnt also on matters that seemed confusing at first.
Having acquired this sufficient knowledge, I am in a better position to tackle and understand any matters related to social enterprises.
References
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